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A Level Business Sept-Feb OCR > Steeds > Flashcards

Steeds Flashcards

(96 cards)

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1
Q

Sectors of the economy

A

Primary
Secondary
Tertiary
Quaternary

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2
Q

Functions of a business

A 
Accounting and finance 
Operations management 
Marketing
HR management 
Customer service 
Sales and support services
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3
Q

Private/public sector and third sector organisations

A

Private sector- businesses owned by private individuals and companies, generally run “for profit”
Public sector- owned and run on behalf of the public, either run or funded by government. Not run “for profit”
Third sector organisations- value driven- not motivated by profit but a desire to achieve social goals (e.g. charities)

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4
Q

Unincorporated/Incorporated businesses

A

Unincorporated- owner is the business, unlimited liability, mostly sole traders
Incorporated- Owner isn’t the business, limited liability, most private limited companies

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5
Q

Unlimited/Limited liability

A

Unlimited- Owner(s) of a business are entirely responsible for its debts. Personal assets can be seized. Owner is the business
Limited- Can only lose what money you put into the business. Owner isn’t the business

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6
Q

Franchise definition

A
  • when you buy the rights to sell an established product
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7
Q

2 ad + 2 dis to franchiser

A 
Adv-
Firm may not have to spend large amounts of money in order to expand 
Applicants can be carefully selected 
Dis-
Element of risk 
Control issues
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8
Q

2 ad + 2 dis to franchisee

A 
Adv- 
Lower risk (proven business concept)
Support, advise and training 
Dis-
Franchise fees
Profit is shared 
Less control and independence
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9
Q

Cooperatives

A

A business run and owned by its members (employees and customers)
Profits shared between members rather than being distributed to shareholders

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10
Q

2 adv + 2 dis of cooperatives

A

Adv-
Legally straightforward to setup
Higher quality of service is likely to be provided
Dis-
Capital can be limited to what members contribute
Weak management- those selected may not have good business knowledge

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11
Q

2- adv + 2 dis of multinationals

A

Adv-
Job creation, significant training+ employment to work force
Adds to hosts countries GDP
Dis-
Domestic businesses may not be able to compete
Exploitation of employees/facilities

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12
Q

Determining size of business

A

Number of employees
Brand awareness
Number of factories, offices and shops

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13
Q

Factors affecting size of business

A

Market size
Nature of product (quality)
Legal structure

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14
Q

Reasons for growth

A

Entrepreneur wants greater challenge
Owners want higher return on investments
Growth into new markets can spread risk

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15
Q

Joint ventures (definition)

A

A commercial agreement between two or more participants who agree to cooperate and achieve a particular objective

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16
Q

Strategic Alliance (definition)

A

An agreement between two companies that undertake a mutually beneficial project while each retains independence

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17
Q

Operations management objectives

A

OM obj- Maximise the amount they produce

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18
Q

Mission statement

A

Overriding goal of the business’ reason for existence, provides a strategic perspective written for the stakeholders

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19
Q

Market orientated

A

Market oriented- prioritises identifying the needs and wants of consumers and creating products that satisfy them

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20
Q

Innovation adv

A
  • adds value to existing products

- increases efficiency

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21
Q

Types of production + definitions

A

Job- Products that are made for a specific need/requirement
Batch- A certain amount of the product is made and production has changed
Flow- Mass production of a product. Continuous movement of items through the production process
Cell- flow production line split into number of self-contained units. Each cell responsible for a significant part of the finished article

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22
Q

2 ad 2 dis of job

A 
Adv-
High quality products
Higher satisfaction for workers 
Dis- 
Product will take long time to make
Higher paid workers as they are higher skilled
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23
Q

2 ad 2 dis batch

A

Adv-
Cheaper labour than job
More efficient than job due to more automation used
Dis-
Downtime for machinery
Potentially demotivating for staff (boring)

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24
Q

2 ad + 2 dis of flow production

A

Advantages-
Cost per unit of production reduced through improved work and material flow
Capital intensive which means it can work constantly
Disadvantages-
Very long set up time and reliant on high-quality machinery
High set up costs

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25
2 ad + 2 dis cell production
Advantages- Improves communication, avoiding confusion/non-received messages Greater worker motivation due to a variety of work Disadvantages- Workers can feel constantly pushed for more output with no rest Recruitment and training of staff must support this approach
26
Factors that influence selecting the production method
``` Nature of products Cost of machinery/technology Workforce Finance Customers Competition Stakeholders/objectives Practicality of change Legal structure of business ```
27
Research and development
The process that enables the creation of new and improved products to meet the needs of customers
28
2 ad + 2 dis of r&d
``` Advantages- Improves the production process Waste reduction Disadvantages- Cost of failure Copying from other businesses  ```
29
Morphological studies
A method that generates ideas are cheaply and quickly- grid system with a range of alternatives to be considered.
30
Advantages of CPA
Reduces risk and cost of complex projects Helps spot which activities have slack and could therefore transfer some resources Provides managers with overview
31
Disadvantages of CPA
CPA based on assumptions and estimates Doesn't guarantee the success of a project Resources may not be as flexible as management hope
32
Division of labour (Specialisation)
When people are allocated into specific tasks. | Intended to increase productivity
33
Advantages of division of labour
Leads to an increase in productivity | Output increases, average costs fall (EOS), profits increase
34
Disadvantages of division of labour
Can be boring and repetitive for worker- may leave/replaced by machinery Lack of flexibility in workforce May be higher training costs
35
Economies of scale
Unit costs fall as output rises
36
Diseconomies of scale
Unit costs rise as output rises
37
Productivity equation
productivity= output/input
38
Labour productivity
Concerned with the volume of output (units) or value (£) produced by each employee
39
Methods of increasing productivity
``` Automation- quicker and consistent Reduce labour- Reduces labour costs Training of staff Monitoring Improved organisation of production (layout) ```
40
Benefits of increased productivity
Increases speed- decreases delivery time Lowers average costs Less staff further reduces costs
41
Drawbacks of increased productivity
Job losses may lead to job insecurity meaning tasks are more difficult with discontent staff
42
Capacity utilisation
A measure of the extent to which the productive capacity of a business is being used Measure of productivity
43
Capacity utilisation formula
Actual level of output/Maximum possible output x100
44
Benefits of increasing capacity utilisation
Average costs fall which increases profit margins Increased efficiency Less wastage
45
Disadvantages of capacity utilisation
Maintenance and breakdowns Additional orders Quality impact
46
Stock control
Processes and controls used by a business to ensure that it has sufficient stock
47
Types of stock
Raw materials Work in progress Finished products
48
Labels on stock control graph
``` Buffer stock Minimum level Reorder level- will be higher the higher the demand Maximum level Lead time ```
49
Economic order quantity (EOQ)
Order quantity that minimises total inventory holding costs and ordering costs
50
Benefits of holding stock
Meets demand EOS Buffer stock
51
Costs of holding stock
Storage costs Security costs Insurance costs Opportunity cost- business could spend costs of holding stock elsewhere
52
Calculating the average stock levels
Maximum + minimum stock levels/2
53
2 ad + 2 dis of joint ventures
Advantages- Share costs Can use each other’s expertise and resources Disadvantages- Conflict may occur Clash of organisational structures (too many of one person e.g. HR departments)
54
adv and dis of strategic alliances
``` Advantages- Sharing resources/expertise New market penetration Disadvantages- Possibly no better off than if you ‘went alone’ legal disputes over who owns what ```
55
Strategy (strategic objective)
Long term plan, based on the business vision
56
Tactics (tactical objective)
Short term, responding to opportunities and threats
57
Adding value
Difference between price of finished product and the cost of inputs
58
How to add value
Build a brand Excellent service Product features/benefits Reduce costs
59
Benefits of adding value
Charging a higher price point Creates a point of difference from competitors Protection from competitors tasking idea and charging less for it
60
Disadvantages of adding value
Not guaranteed that the cost will be recouped | Increase in price may reduce sales
61
Aim
Long term goal
62
Innovation
Practice of developing and introducing new products/services. Taking an existing product and making it better
63
Just in time production (JIT) (Kanban)
Management strategy that a company receives good as close as possible to when they are needed. Part of lean production
64
Benefits of JIT
Low storage costs Eliminates waste Unit costs fall (insurance)
65
Drawbacks of JIT
Complicated system Expensive materials Reliant on suppliers
66
Last in first out (LIFO)
The most recently produced items are sold first.
67
1st in 1st out (FIFO)
Assets purchased or products made first are sold first.
68
Electronic point of sale (EPOS)
A combination of hardware and software designed to help you run businesses more effectively
69
Supply factors
Labour costs Land costs Energy costs Transport costs
70
Demand factors
Customer convenience Labour skills Site suitability Image
71
Quality control
Process of inspecting products to ensure that they meet the required quality standards
72
Advantages of quality control
Reduces wastage Increased reputation Reduces costs EOS
73
Disadvantages of quality control
Employees aren't encouraged to take responsibility for the quality of their own work Increased costs
74
Logistics
Flow of things from origin to point of consumption
75
Supply chain management
The interrogation of the buying of supplies, production, warehousing and transportation
76
Reshoring
Transferring a business operation back to county where it was originally located
77
Offshoring
Practice of basing a businesses operations overseas
78
Outsourcing
Obtain goods/services by contract from an outside supplier
79
Benefits of reshoring
Lowers costs Lowers lead times No impact of exchange rate Lowers CSR implications
80
Drawbacks of offshoring
Longer lead times Increases management costs Implications of CSR
81
Kaizen production
An approach of constantly introducing small changes in a business to improve quality and efficiency
82
Advantages of kaizen
Small changes require less capital investment | Encourages ownership of work, improves motivation
83
Disadvantages of Kaizen
Employees may be reluctant to make suggestions | Employees may feel under pressure and stressed
84
Ergonomics
Looks at relationship between employees and capital equipment being used so minimum time is spent on machines
85
Advantages of ergonomics
Saves time Employees may feel more motivated Savings although aren't significant it adds up over time
86
Disadvantages of ergonomics
Employer has to pay the cost of ergonomic activity Increases costs Breakdowns leads to increased down time
87
Subcontracting
Production of a particular part of a product is undertaken by another firm
88
Importance of customer service
Adds value Retains customers Improves reputation
89
Measuring customer service
Speed Complaints Customer loyalty
90
Methods of improving customer service
Training Roleplay Benchmarking Advice
91
Decision making
Process of making choices by gathering information, involves an opportunity cost
92
Corporate social responsibility (CSR)
About responsibility to all stakeholders | Most firms implement a code of practice/policy
93
SWOT
Strengths Weaknesses Opportunities Threats
94
Internal audit
Business assesses its strengths and weaknesses in relation to competitors- done externally
95
External audit
Looks at opportunities open to the business and the threats faced in internal environment
96
Product orientated
Product orientated- prioritises making a product high quality

A Level Business Sept-Feb OCR (2 decks)

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